REGIONAL REPORT: Western U.S. Sees Fuel Blending, Cigarette Tax Hikes and More

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REGIONAL REPORT: Western U.S. Sees Fuel Blending, Cigarette Tax Hikes and More

04/20/2009

By Hank Behar

NEW YORK -- Pity Washington State’s Ways and Means Committee—it has the job of drafting a budget proposal in the face of the state’s slowest growth rate in 30 years, and the budget deficit could reach $9 billion. Draconian cuts in service are therefore expected, in combination with a possible tax increase. Polls have indicated strong opposition to just about every proposed tax, and lawmakers are strategizing coupling the tax proposal with a specific state program may open the way to an acceptable budget.

As a result, Lea Wilson, executive director of the Washington Oil Marketers Association (WOMA), advised her members to expect "some bad news since this will be the most trimmed-back budget proposal in recent history."

But it hasn’t held WOMA back from continuing its fight in the legislature on behalf of its membership. For example, one proposal would require all terminal operators to make a non-blended fuel available for marine and aviation purposes. Some petroleum interests objected on the grounds it would open a loop-hole in state and federal ethanol mandates, which prompted the House Transportation Committee to kill the proposal. It advised WOMA and oil companies to work together and come back next year with a contractual agreement. Shy of that, the House will take up the issue.

On another front, a coalition of marketers, lobbyists and government staff is being assembled in an attempt to kill a bill that would explore export taxes on refined fuel from Washington State.

"This bill would negatively affect our marketers doing business in neighboring states, as well as marketers exporting fuel into those states," said Wilson, who has pledged to participate in the coalition.

New MexicoNew Mexico, like almost every other state, is having trouble raising revenue to meet its budgetary needs. Fortified by a poll showing 76 percent of registered voters favored raising cigarette taxes by $1 a pack, the legislature proposed doing just that. But to no avail— the proposal was tabled by the House Taxation and Revenue Committee.

The next attempt was a proposal featuring a 50-cent per pack increase, but the committee turned that down too, by a vote of 10-6.

Tobacco industry representatives applauded the committee’s action, pointing out if the tax went up, smokers would look elsewhere, such as the Internet, for cheaper cigarettes.

"Retailers would also lose out," said Ruben Baca, executive director of the New Mexico Petroleum Association (NMPA). "And the state would end up with less revenue since the tax is now 91 cents and doubling it, or even raising it by 50 cents, would drive smokers to buy their cigarettes anywhere but New Mexico."

"In addition, 2 percent of cigarette sales are made from Native American smoke shops that are exempt from the state tax," Baca said. "If the increase would have been approved that number would have gone up to about 50 percent, driving down tax revenues even more."

UtahCurrently in Utah, the penalty for a gas drive-off can be up to six months in jail. "But no judge is going to put someone in prison for a gas skip, especially a first-offender, so we’re pleased that the State legislature this session added the penalty of the loss of a drivers’ license for six months," said John P. Hill, director of the Utah Petroleum Marketers & Retailers Association (UPMRA).

The law was introduced by a senator and former police chief, who knows first hand the travails involved in chasing after pump-runners. Hill plans to publicize the new law with pump stickers and other means, to let the public know what can happen if they steal gasoline.

In the meantime, Hill already zeroed in on one piece of legislation UPMRA will be advocating at next year’s legislative session—increasing the insurance cap for underground storage tank releases.

"The PST fund currently has a maximum payout of $1 million per release, which hasn’t changed since the ‘80s, and UPMRA members believe it’s time to raise the amount to a more realistic level—$2 million—which more accurately reflects the increasing cost of environmental clean ups," Hill said.

ArizonaThere are approximately 66 plastic grocery bags in one pound. That adds up to 132,000 in a ton, and more than 105 million in 800 tons—which is the number of tons of plastic bags a single Arizona recycling campaign called Bag Central Station collected in its first year of existence.

"It’s a totally volunteer program," said Tim McCabe, president of the Arizona Food Marketing Alliance, which is one of the primary organizations behind the program. "Customers can bring plastic bags of any kind, grocery or otherwise, into our grocery stores and we collect them for recycling into new plastic bags and building materials. Our alliance represents 5,600 outlets with more than 100,000 employees, so we’re a good cross-section of the state’s business community, and I’m happy to say that the program has been a great success. It’s been praised by both the Alliance for Innovation, and the Environmental Protection Agency."

Bag Central, which started in Phoenix, spread throughout the state, and as impressive as its collections have been, there is still a long way to go. Phoenix alone uses 300 million bags annually, and the nation as whole consumes 380 billion.

But considering plastic litter of all kinds can take 1,000 years to decompose, every bag deposited in a Bag Central Station bin is one less in the ground.